Economic History of Canada - The Second World War and The Boom Years

The Second World War and The Boom Years

The turn around brought about by the command economy imposed at the beginning of the Second World War was immense. Unemployment virtually disappeared by 1940 as soldiers were recruited and factories turned to war production. Canada was in the unusual situation of helping Britain financially, through a program similar to the American Lend Lease.

In the twenty-five years after the war, there was an immense expansion in the Canadian economy. Unemployment remained low and the end of wartime production was quickly turned over to making consumer goods. Canada, along with many other developed nations, firmly established itself as a welfare state with publicly-funded health care, the Canada Pension Plan, and other programs.

During this period, the Canadian economy became much more closely integrated with the American one as tariff barriers fell and trade agreements like the Canada-United States Automotive Agreement and the "Hyde Park Declaration" were signed.